Saturday

8th May 2021

Russia relaxes EU food ban, counts costs

  • (Photo: malyousif)

Russia has said its ban on EU food imports will cost it “hundreds of billions of rubles” in subsidies.

Its agriculture minister, Nikolai Fyodorov, told the Rossiya 24 broadcaster on Wednesday (20 August) the government has set aside 50 billion rubles (€1.03bn) for this year to keep shop shelves stocked with EU-type products.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

"We are trying to prove that it [the 50bn ruble subsidy] needs to be somewhat higher," he noted.

“The volume of additional support needed to substitute for the embargoed items in full – if we are talking about short-term, through the end of the year – is tens of billions of rubles”.

“But there are also medium-term measures: Next year and in the subsequent years, you could say that this sum will be measured in the hundreds of billions of rubles”.

Russia imposed the ban on selected EU food items on 6 August in retaliation for EU sanctions over the Ukraine conflict.

Also on Wednesday, its prime minister, Dmitry Medvedev, took a long list of products off the blacklist.

The decision, published by Russia's food authority, Rosselkhoznadzor, includes: trout and salmon hatchlings; potato and onion seeds; hybrid sugar maize and peas for planting; lactose-free dairy products; selected vitamins and flavour additives; protein concentrates; and selected food fibers and food additives.

The same day, its consumer protection agency, Rospotrebnadzor, in a highly publicised move, ordered McDonalds to close four restaurants over unspecificed food safety violations.

Both sides are currently counting the cost of the sanctions confrontation.

The European Commission has so far earmarked €155 million to help EU farmers keep prices stable.

Its spokesman, Roger Waite, told EUobserver the full cost of the Russia ban is likely to be “massively under €5 billion”. But a Belenux-based bank, ING, has estimated it will cost €6.7 billion and 130,000 jobs.

With the EU and US also targeting Russian banks and energy firms with a ban on long-term debt, the overall Russian cost is likely to be higher still.

Russia's Vedomosti newspaper last week reported that Rosneft, the country's top oil producer, has asked the government to buy 1.5 trillion rubles (€30bn) of its bonds so that it can make debt repayments.

On the food side, World Bank data says Russia is the seventh largest country in terms of arable land per capita.

The data also says its livestock production is growing, but there is a steep downward trend in crop output and an ever steeper trend in rural depopulation.

For his part, Dmitry Yuriev, Russia’s deputy agriculture minister, told the FT this week that new programmes to develop logistics and quality-control systems in reaction to the EU food ban will take several years to implement.

Citing a lack of refrigerated storage facilities, he said: “Up to half of the fruit production from small farms and 20 percent of industrial vegetable production [in Russia] just rots away".

Analysis

Can Europe afford a Russia trade war?

One trade expert has described the EU-Russia sanctions war as economic “mutually assured destruction”, but strategic considerations continue to trump financial problems for both sides.

News in Brief

  1. Report: Czech minister plotted to bury evidence on Russian attack
  2. Putin promotes Russia's 'Kalashnikov-like' vaccine
  3. Coronavirus: Indian variant clusters found across England
  4. UN report encourages EU methane cuts
  5. EU court upholds ban on bee-harming pesticides
  6. Israeli tourists welcomed back by EU
  7. EU duped into funding terrorist group, Israel says
  8. Brussels prepares portfolio of potential Covid-19 treatments

Vietnam jails journalist critical of EU trade deal

A journalist who had demanded the EU postpone its trade deal with Vietnam until human rights improved has been sentenced to 15 years in jail. The EU Commission says it first needs to conduct a detailed analysis before responding.

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic Council enters into formal relations with European Parliament
  2. Nordic Council of MinistersWomen more active in violent extremist circles than first assumed
  3. Nordic Council of MinistersDigitalisation can help us pick up the green pace
  4. Nordic Council of MinistersCOVID19 is a wake-up call in the fight against antibiotic resistance
  5. Nordic Council of MinistersThe Nordic Region can and should play a leading role in Europe’s digital development
  6. Nordic Council of MinistersNordic Council to host EU webinars on energy, digitalisation and antibiotic resistance

Latest News

  1. EU ambassadors flock to Red Square for Putin's parade
  2. MEPs win battle for bigger citizens' voice at Conference
  3. Hungary gags EU ministers on China
  4. Poland and Hungary push back on 'gender equality' pre-summit
  5. EU preparing to send soldiers to Mozambique
  6. EU now 'open' to vaccine waiver, after Biden U-turn
  7. EU mulls using new 'peace' fund to help Libyan coast guard
  8. Poland 'breaks EU law' over judges, EU court opinion says

Join EUobserver

Support quality EU news

Join us